Reports: Hershey wanted more than Mondelez offered

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Major media outlets are reporting that the Illinois-based maker of Oreo Cookies fell short of Hershey’s $125 per share starting price.

On the record, the companies are not talking about numbers. But sources talking to national reporters behind the scenes seem to be.

Illinois-based Mondelez, maker of Oreo cookies and numerous other snack other brands, initially made a $23 billion pitch, which was rejected by Hershey’s board on June 30.

Mondelez Chairman and CEO Irene Rosenfeld on Monday said, “Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement.”

What might that mean?

Bloomberg is reporting that the original offer, at $107 per share, was later increased to $115 per share before backing away, citing a person familiar with the private talks, and who asked not to be identified. Hershey’s starting point was $125 per share, the source reportedly said.

The Wall Street Journal published a similar report, which said Rosenfeld herself last week privately indicated to Hershey CEO J.P. Bilbrey that Mondelez would go up to $115 per share.

WSJ reported Hershey indicated no deal would be possible before a reconstitution of the Hershey Trust Co., which isn’t expected to happen until sometime next year.

The charitable trust is Hershey’s main stockholder, controlling more than 80 percent of the company’s voting shares, which gives the body significant leverage over any possible sale of the Dauphin County candy company. Three members of the trust’s board also sit on the Hershey Co. board.

Following investigation into its operations and governance by the state Attorney General’s Office, the trust last month agreed to new restrictions, which will increase board size and limit members’ tenure. Under that deal, five current members, including Chairwoman Velma Redmond, will retire through Dec. 31, 2017.

Meanwhile, neither company would elaborate publicly on merger talks after the June 30 rejection, even as major media outlets were reporting that inside sources were saying that the talks were not dead.

This morning, Hershey spokesman Jeff Beckman acknowledged only that “there were additional communications from Mondelez.”

“And we can confirm our understanding that Mondelez is no longer pursuing a combination with Hershey. Beyond this we are providing no further comments,” Beckman concluded.

As the New York Times pointed out, the past three months have seen a spike for both companies’ stock, followed by some lesser peaks and valleys, with Hershey trending slightly upward as Mondelez trended slightly downward.

That changed on Monday.

Hershey’s shares fell nearly 12 percent in after-hours trading, hitting $98.06. Their value was at $99.54 as of mid-morning today.

Mondelez, meanwhile, gained about 3 percent, the New York Times noted. That stock stood at $44.67 at mid-morning.

Shares of Hershey tumbled almost 12 percent in after-hours trading, while those of Mondelez gained about 3 percent.

Here’s what Reuters had to say about the story, and here is Fortune’s report.

Related stories

Chocolate Town: CPBJ coverage of The Hershey Co. and Hershey Trust Co.